Programs for beginning farmers, ranchers

The average age of principal farm operators in the US increased from 54 years-of-age in 1997 to 57 years-of-age in 2007. Today, according to the Bureau of Labor Statistics, sixty percent of agricultural producers are age 55 or older.

This general aging of US farmers and ranchers highlights the importance of programs that focus on educating and assisting the next generation of producers. Furthermore, because many US agricultural producers approaching retirement are particularly interested in the continuation of their farming or ranching operation to future generations, it becomes increasingly vital that young producers gain knowledge concerning the acquisition, management, and conservation of agricultural land.

Several programs developed and administered by public organizations such as USDA and the South Dakota Department of Agriculture are important tools for new and beginning South Dakota agricultural producers.

USDA Programs

For many years USDA has developed and implemented programs targeted to the next generation of agriculture producers. For example, the Food, Conservation, and Energy Act of 2008 apportioned $75 million from 2009 to 2012 for education, training, and outreach programs to enhance the efficiency and viability of beginning farmers and ranchers. The recently passed Agriculture Act of 2014 provides $20 million annually for 2014 through 2018 to support similar activities. The information that follows is a partial list of the USDA agencies, and the programs they offer, that are of special interest to beginning farmers and ranchers.

Farm Service Agency (FSA)

FSA Loan Program

FSA directs a portion of its loan portfolio to beginning farmers and ranchers who otherwise may fail to quality for credit from traditional sources. FSA defines beginning farmers and ranchers as those having 10 years or less of production agriculture experience. For these individuals, FSA offers regular loans and loan guarantees through their farm loan program. FSA also offers flexibility in application, eligibility, and security requirements to both new and small producers. FSA provides operating and ownership loans with terms and rates designed to mitigate some of the obstacles facing producers that lack a full credit history. For example, FSA offers Microloans containing special terms and conditions to eligible producers who use the credit to pay for various operating, production, and marketing expenses. Unlike commercial loans, FSA loans are temporary and designed to help producers ultimately obtain credit from commercial sources. Loan programs from FSA available to beginning farmers and ranchers include the following:

Guaranteed Loan Program

Direct Loan Program

Land Contract Guarantee Program

Guaranteed loans are provided by commercial lenders but are guaranteed by FSA. These guarantees are provided on ownership, operating, and conservation loans. Direct loans are directly provided and managed by FSA. Ownership, operating, conservation, and emergency loans are provided through the Direct Loan Program. Land contract guarantees are available to landowners who wish to sell real estate through a land contract to beginning or socially disadvantaged farmers or ranchers.

More information on FSA loan packages for beginning farmers and ranchers is available on the FSA website.

Conservation Reserve Program – Transition Incentives Program

Since its inception in 1985, the Conservation Reserve Program (CRP) has offered annual payments to landowners or renters in exchange for the removal of highly erodible acres from production. Special treatment of CRP land transferring from retired or retiring land owners is available by the Transition Incentives Program (TIP). For land expiring from CRP contracts, TIP provides two additional annual rental payments to retiring landowners on the condition that they sell or rent this land to a beginning or socially disadvantaged farmer or rancher. FSA defines socially disadvantaged farmers and ranchers as those individuals who are members of groups that have historically been subjected to racial or ethnic prejudice. The new owner or renter must return the land to production using sustainable methods.

NRCS offers various tools that assist farmers and ranchers with implementing conservation practices that help conserve the nation’s air, water, soil, and other natural resources. Programs such as Environmental Quality Improvement Program (EQIP) contain provisions specifically addressing the needs of new and beginning producers. In general, EQIP provides financial and technical assistance to support conservation practices on eligible land. Socially disadvantaged, beginning producers, and veterans may quality for increased payment rates and advanced payments to purchase eligible supplies and materials to implement conservation practices consistent with their EQIP contracts. Specifically in regard to advance payments, EQIP now provides an increase in the limit from 30 to 50 percent of total costs for eligible participants.

More information on EQIP and other NRCS programs is available on the NRCS website.

National Institute of Food and Agriculture (NIFA)

NIFA’s Beginning Farmer and Rancher Development Program (BFRDP) was first authorized by the 2008 Farm Bill and then reauthorized by the Agricultural Act of 2014. USDA estimates that aid associated with BFRDP will be approximately $19.2 billion dollars in fiscal year 2014, and this funding will be directed to organizations and activities that support beginning farmers and ranchers. Organizations receiving funding priority include nongovernmental, community-based, and educational organizations having employees with expertise in training, assisting, and educating new agricultural producers. A portion of program funds will be directed to limited resource and socially disadvantaged beginning producers, farm workers with goals of becoming independent producers, and veterans interested in farming or ranching.

USDA has identified three types of eligible projects for BFRDP: 1) Standard Projects which address education, training, outreach, and assistance initiatives for beginning farmers and ranchers; 2) Educational Enhancement Projects that will help coordinate and evaluate Standard Projects; and 3) Curriculum and Training Clearinghouses that will disseminate curricula and training materials to program participants and the organizations that serve them.

USDA’s National Institute of Food and Agriculture (NIFA) will award grants through a competitive process. The NIFA’s 2014 fiscal year Request for Application is available later this spring. These funds are available to organizations offering programs to assist beginning farmers and ranchers. Producers are only indirect beneficiaries of this program – they do not receive funds directly.

Recognizing that beginning farmers and ranchers have needs that differ from those of established producers, South Dakota Department of Agriculture offers two innovative programs to benefit new producers. The first is called Farm Link. This program maintains a directory of farmers and ranchers designed to foster a mentor relationship between beginning and established producers. Through these connections, Farm Link helps new and beginning farmers and ranchers gain access to land, resources, support, and knowledge. The second program is called Beginning Farmer Bond. This program enables lenders, including individuals, partnership, and corporations, to receive interest payments that are exempt from federal taxes on loans made to beginning farmers and ranchers. Participating in this program may allow beginning producers an opportunity to receive loans at reduced interest rates.

More information on South Dakota Department of Agriculture’s Beginning Farmers and Ranchers program is available on the SDDA website.